▶ At Groupon, Commerce Gets Help From Comedy
CHICAGO - Groupon is either creating a new approach to commerce that will change the way we eat and shop and interact with the physical world, or it is a sure sign that Internet mania is once again skidding out of control. Or both.
This Chicago-based company offers discounts on products and services - a business model many Internet start-ups have tried to develop. But Groupon pulls in more than $1 billion in annual revenue in the United States and overseas, and has about 50 million subscribers in 35 countries. Groupon’s breakthrough? Not the deals so much as an ingredient that was both unlikely and ephemeral: words.
“People have grown numb to the elements of advertising that pander to their fears and hopes, that insult their intelligence with safe, bland approaches at creativity,” says Aaron With, Groupon’s editor in chief. “We’re mixing business with art and creating our own voice.”
The Voice. This, Groupon says, is what subscribers respond to as much as the deal itself. Groupon borrowed some tools and terms from journalism, softened the traditional heavy hand of advertising, added some banter and attitude and married the result to a discounted deal.
“Thirty percent of our subscriber base makes over $100,000 a year,” says Mr. With. “They don’t need $20 off at a restaurant.”
The company shuns being thought of as a marketer or, worse, an ad agency, promoting cheap pizza or sushi for anyone who wants to hire it. The hope instead is that its users will eventually perceive it as an impartial guide to a city or a neighborhood, somewhat in the manner of the local paper’s weekend section.
There are now hundreds of knock-offs and imitators, some of them trying to undercut the original by charging the merchant less than Groupon does; Groupon’s closest competitor, Living Social, is backed by Amazon, the retailing giant that has a history of winning.
“We’re not at all concerned any competitor is going to come in and start writing like us,” says Mr. With. “They try but fall flat.”
But Groupon has scrambled to snap up overseas copycats, helping it build an impressive global network in record time. In Japan last summer, it bought Q:Pod for an estimated $10 million.
Just about everyone in Groupon’s editorial team of more than 400 is under 30. Mr. With himself is 29 and has no journalism or marketing background: he worked for a Chicago nonprofit and, more relevantly, was once in a band with Andrew Mason, Groupon’s chief executive.
“A lot of professional writers apply here. I’ve had applicants from Rolling Stone, The Wall Street Journal,” said Keith Griffith, director of recruiting. “But it’s really hard to get them to do what we’re looking for. It’s easier to teach people than unteach them.”
Here is one of the questions Groupon asks prospective hires:
Q. Which is the most interesting way to describe a 4,700-pound chandelier?
A. Blinged out
B. More brilliant than a studious Christmas tree
C. A death trap
D. Really big and shiny
Not enough people pass the test - the correct answer is B - or do well in the sample write-up.
Another reason the employment skews young is because the pay for new writers is less than extravagant - about $37,000 a year. Whitney Holmes, a 27-year-old senior editor who is a poet with a fine arts degree from the University of Alabama, is in charge of teaching recruits the Voice.
“Inspiration is a bunch of hooey,” Ms. Holmes says. “You can teach someone how to put together things that are funny.”
Addressing a new crop of writers at a training session, she seeks first to reassure. “Achieving Groupon Voice is not about being inherently funny. If it were, 93 percent of our writers would not have jobs,” she says.
The writers laugh uneasily. Ms. Holmes takes them on a brisk tour of the history and theory of humor. Much humor, she notes, is based on superiority - laughing at the well-deserved misfortune of idiots. Groupon doesn’t do this. Incongruity, however, is fine.
An example of a successful use of the Groupon Voice , for a yoga and massage service:
“Today’s modern world, with its plethora of countries, panoply of waterways, and constantly changing laws about what is and what isn’t mail fraud, is as confusing as it is stressful. Get a clear definition of relaxation with today’s Groupon.”
For a dentist:
“The Tooth Fairy is a burglarizing fetishist specializing in black-market ivory trade, and she must be stopped. Today’s Groupon helps keep teeth in mouths and out of the hands of maniacal, winged phantasms.”
Ms. Holmes says: “Every joke has a setup and a payoff. If the setup is confusing, the payoff will never land.”
Alas, sometimes the payoff for the company offering the service disappears into the blur of words. Restaurants have been overwhelmed by toosuccessful Groupons where they are forced to sell many meals too cheaply. Also, given the speed of its acquisitions overseas, Groupon has established only limited quality control over the deals being struck with local businesses.
Still, Google tried to buy Groupon in December for a reported $6 billion. It was an immense sum for a two-yearold company, but this was one deal that Groupon didn’t like.
Instead, it got the money to expand - $950 million - through another round of venture capital financing.
Groupon boasts of a protracted editorial process . After a write-up is complete, it goes to fact-checking. Then it’s on to the Voice editor, Ben Kobold, who in the tradition of editors everywhere, glances at the copy, sighs, slumps down in his chair and often proceeds to rewrite most of it. Then comes a riff from one of the four Groupon humor writers. The more you can laugh with Groupon, the more you will like it. Or so the company hopes.
“With piano recital season coming up, faking one’s own death is becoming more and more popular,” was the beginning of one recent riff. Angry letters followed. Cullen Crawford, the writer, shakes his head. “Just because it had the word ‘death,’ ” he explains.
Groupon seems likely to fulfill the grander dreams of its investors and early employees by going public in the next year. The offering could value the company at $25 billion, which would top Google’s 2004 debut as the richest ever for an Internet company.
Perhaps that sum will seem in hindsight to be a great deal, as was true with Google itself. Or maybe it will be Groupon’s best joke ever.
Groupon relies on an editorial department of more than 400 people to produce the word magic that helps sell discounts.
Groupon is expected to go public at a valuation of up to $25 billion. For now it has a start-up culture, with offbeat decor.
By DAVID STREITFELD
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